NTL Admits £45m Accounting Error

18 November 2002

Britain’s largest cable communications operator, US-owned NTL, denied it has ‘done a WorldCom’ after it emerged last week that the company’s underlying earnings had been wrongly boosted by an accounting error.

NTL is still completing its investigation, but believes that EBITDA (earnings before interest, tax, depreciation and amortization) could have been flattered to the tune of £45 million ($71m; €71m), around 10% of the total for the first nine months of the year.

The mistake involves the misallocation of expenses between the capital and operating budgets – a similar error, albeit on a much smaller scale, to that of WorldCom. Although the expenses involved have not been revealed, many are said to be invoices from contractors.

On a more positive note, NTL posted a narrowing of third-quarter losses to £320.6m, down 56% from last year’s £736.8m. It gained 105,000 broadband internet subscribers, taking the total to 380,600, but lost 29,000 of its overall TV, telephone and web customers.

Data sourced from: multiple sources; additional content by WARC staff